[2018-03-31] Everything You Were Afraid to Ask About Crypto Taxes

[crazy-pilot]

Many cryptocurrency investors have made a fortune the past several years selling high-flying bitcoin and other cryptocurrencies for cash. Unfortunately, far too many of them in the U.S. did not report this taxable income to the IRS.

The agency figures hundreds of thousands of U.S. residents did not report income from sales or exchanges of cryptocurrency and it might be able to collect several billion dollars in back taxes, penalties, and interest.

In just a taste of what's to come: After a two-year battle with the IRS, Coinbase, one of the largest cryptocurrency exchanges, recently turned over information about 13,000 customers who had traded more than $20,000 worth over a two-year period.

https://www.coindesk.com/everything-afraid-ask-crypto-taxes/

[1714601511]

1714601511

[buwaytress]

I remember last year they claimed a "partial victory" in courts, and said they only had to hand over a few thousand clients details. Seems the decision was backtracked or something if it's now once more details of all those thousands initially asked by IRS in 2016. Coinbase might get all the public attention now but I won't be surprised if all the ICO owners and investors get the taxman's call when next year's deadline comes up.

What we need to look forward to now will be when the first Coinbase customers take IRS to court for counterclaims. What the courts over there need are precedents.

[Kprawn]

I do not know why people using regulated exchanges think that they could get away with not paying taxes. You have to go

through the KYC/AML to link your real identity to your account, so there are no way to bypass the tax obligations, if the IRS

can trace you through these exchanges. Now, people will have to pay all those penalties, and interest .... because they were

greedy and stupid. 

[Karartma1]

Hopefully one day Bitcoin will be so widespread that there will be no need to use fiat money for the things we need. If I keep my bitcoins as they are (an entry on the blockchain) why should I be taxed, no legal tender here.

[Alex077]

Many cryptocurrency investors have made a fortune the past several years selling high-flying bitcoin and other cryptocurrencies for cash. Unfortunately, far too many of them in the U.S. did not report this taxable income to the IRS.

https://www.coindesk.com/everything-afraid-ask-crypto-taxes/

The situation is very controversial. On the one hand – there is no tax legislation, even in the USA, but authorities want to collect taxes. Even if the law will pass, it wouldn’t have any retroactive effect.

[BitHodler]

Hopefully one day Bitcoin will be so widespread that there will be no need to use fiat money for the things we need.

People are too much hinting towards that what gives them the convenience of usability and adoption, which in understandable, but on the other hand also value state issued money over a decentralized initiative as Bitcoin.

Another thing is the fact that people aren't ready or even willing to ditch fiat for Bitcoin completely. State issued money represents value and security for them, which is what they don't see in Bitcoin.

It's a sheeple form of mentality, that for sure, but in order to make Bitcoin be that what you want it to be, the mass will be needed. I won't yet completely rule out such a scenario, but I won't count on it either.

[ranman09]

So are they now tracking down those who did not pay taxes? Well at the first place Coinbase should have imposed this to their rulings, right? Now maybe, just maybe, those people think it's okay. For Coinbase doesn't even bother them before.

[Paractor]

So are they now tracking down those who did not pay taxes? Well at the first place Coinbase should have imposed this to their rulings, right? Now maybe, just maybe, those people think it's okay. For Coinbase doesn't even bother them before.

Coinbase is getting way too big to be imposing laws like this on cryptocurrency.
There was something about them in the news the recent week where they will be accepting erc20 tokens so their claws will be getting further into your pockets with alt coin trading activity&habits as well.

[aoluain]

Hopefully one day Bitcoin will be so widespread that there will be no need to use fiat money for the things we need.

People are too much hinting towards that what gives them the convenience of usability and adoption, which in understandable, but on the other hand also value state issued money over a decentralized initiative as Bitcoin.

Another thing is the fact that people aren't ready or even willing to ditch fiat for Bitcoin completely. State issued money represents value and security for them, which is what they don't see in Bitcoin.

It's a sheeple form of mentality, that for sure, but in order to make Bitcoin be that what you want it to be, the mass will be needed. I won't yet completely rule out such a scenario, but I won't count on it either.

We have to value state issued currencies because that is how the financial and taxation
systems are setup. They are all linked. I cannot ask my employer to pay me in BTC i
will only have to change it back to FIAT to pay for my groceries, petrol, electricity etc.

[BitHodler]

We have to value state issued currencies because that is how the financial and taxation
systems are setup. They are all linked. I cannot ask my employer to pay me in BTC i
will only have to change it back to FIAT to pay for my groceries, petrol, electricity etc.

There is a difference between valuing something because you actually like it, see its added benefit, and being forced to use something because people like you don't want to strive for financial freedom that this system can't provide.

I definitely understand where you are coming from, but you fit in the category of people I was pointing at in my previous post. Even though I think it's difficult to reach that state, I am willing to fight for it though.

I however want to ask you what your opinion on state issued money is and Bitcoin, where the mathematically minting process releases supply in circulation roughly every 10 minutes on average, with a fixed hard cap.

[Theb]

These people should know that there are far more worst consequences that will happen in the future, they might be enjoying their income from cryptocurrency without tax right now but with the government and the country suffering the government might retaliate with some form of strict regulation or even banning cryptocurrency as a whole. These people need to see that they are taking advantage of the system and in that process is also hurting the economy. Anonymity and untraceable transactions as well as greed are the ones pushing them to do this kind of things, and I think the government will start on removing those features in a form of legislation.

[aoluain]

We have to value state issued currencies because that is how the financial and taxation
systems are setup. They are all linked. I cannot ask my employer to pay me in BTC i
will only have to change it back to FIAT to pay for my groceries, petrol, electricity etc.

There is a difference between valuing something because you actually like it, see its added benefit, and being forced to use something because people like you don't want to strive for financial freedom that this system can't provide.

I definitely understand where you are coming from, but you fit in the category of people I was pointing at in my previous post. Even though I think it's difficult to reach that state, I am willing to fight for it though.

I however want to ask you what your opinion on state issued money is and Bitcoin, where the mathematically minting process releases supply in circulation roughly every 10 minutes on average, with a fixed hard cap.

Lol, people like me?
Im not on BCT because I love FIAT, im here for BTC.
I dont want to be answering to banks, i want to control my own finances,
but im not sure I will be able to pay my mortgage with BTC in my lifetime.

On the taxes thing, one thing is for sure, when we engage with FIAT from
crypto we have to be prepared to pay them.

[Gotottack]

Many cryptocurrency investors have made a fortune the past several years selling high-flying bitcoin and other cryptocurrencies for cash. Unfortunately, far too many of them in the U.S. did not report this taxable income to the IRS.

The agency figures hundreds of thousands of U.S. residents did not report income from sales or exchanges of cryptocurrency and it might be able to collect several billion dollars in back taxes, penalties, and interest.

In just a taste of what's to come: After a two-year battle with the IRS, Coinbase, one of the largest cryptocurrency exchanges, recently turned over information about 13,000 customers who had traded more than $20,000 worth over a two-year period.

https://www.coindesk.com/everything-afraid-ask-crypto-taxes/

Coinbase did this because they wanted to pass on the burden of paying taxes to the investors who also earned from it. This is what companies do actually. They do not want to shoulder taxes, hence, they include VAT in every transaction so as to transfer the burden to those who make use of it. This is nothing new. I am just wondering how they are able to do the transferring of data without violating the contract it has with those of their clients if there is any? Surely, Coinbase will no longer earn this much again, looking at how badly it treated its clientele. Nevertheless, Coinbase may argue that it is only doing its duty under the law in regard tax obligations.

[ranman09]

So are they now tracking down those who did not pay taxes? Well at the first place Coinbase should have imposed this to their rulings, right? Now maybe, just maybe, those people think it's okay. For Coinbase doesn't even bother them before.

Coinbase is getting way too big to be imposing laws like this on cryptocurrency.
There was something about them in the news the recent week where they will be accepting erc20 tokens so their claws will be getting further into your pockets with alt coin trading activity&habits as well.

Oh, better not use Coinbase then. Good thing I don't use it.